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News/Business. Becky Quick, Joe Kernen, Andrew Ross Sorkin. Business news and talk as the trading day unfolds on Wall Street. New. (CC)

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03:00:00

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Us 29, Biden 21, China 19, Spain 14, Romney 14, Becky 13, Bausch & Lomb 12, Joe Biden 12, Ryan 12, Paul Ryan 11, Roger Altman 11, Europe 10, S&p 10, Erskine Bowles 9, Obama 9, Roger 9, Kentucky 8, Softbank 8, Alan Simpson 8, Goldman Sachs 7,
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  CNBC    Squawk Box    News/Business. Becky Quick, Joe Kernen, Andrew Ross Sorkin.  
   Business news and talk as the trading day unfolds on Wall...  

    October 11, 2012
    6:00 - 9:00am EDT  

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i'm becky quick along with joe kernen and andrew ross sorkin. and the s&p is coming off four straight days of red. the dow logged another triple digit loss yesterday. among the reasons were a tepid start to the earnings season and worries with sluggish global economic growth. the three major indexes are now in negative territory for the month. we'll talk about the markets this morning with roger altman who is the chairman of evercore partners. plus our what's working now series continues. today's featured guest is james kieffer. and as joe mentioned, the vp debate night. joe biden and paul ryan set to square off in kentucky. >> we think he's probably going to come at me like a can november ball. but the achilles' heel he has is president obama's record. >> i just want to make sure that when i say these things that i don't have the congress saying, no, no, i don't have that
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position or that's not the governor's position. >> among our guests this morning, reince priebus. also former senator ted kaufman. he once served as biden's chief of staff. and he's been prepping the vice president for tonight's debate. and there is new poll data out this morning. mitt romney now leads president obama by 48% to 47% in virginia. and in florida, obama leads 48% to 47% among likely voters. and in ohio, romney trimmed two percentage points off of obama's pre-debate lead. the president holds a 51-45% edge among likely vote everies there. john harwood will be joining us live from kentucky with more in just a few minutes. but first andrew has this morning's top business stories. we got some banking news this morning on wall street. jpmorgan cfo dug braunstein will
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be stepping down. he'll take on another post within the company, so he won't be leaving, but it was on his watch that the jpmorgan london whale experience happened and there remains scrutiny all around that. he's expected to lead the bank's earnings call tomorrow morning, so a lot of interest thp. in other headlines related to jpmorgan, deal book is reporting that the fbi investigation into the bank's $6 billion trading loss may not inchbly indicate jamie dimon, buts investigation does not appear to touch on the echelons of top management, but the company is still under investigation by the sec as to whether it misled investors about the size of the loss and it's worth noting it got tapes. so the fbi is listening to tapes. that will be very interesting. and goldman sachs says it has found little substance as to allegation that by greg smith. he you may remember claimed that
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the bank had a toxic environment the where bankers referred to clients as muppets. the financial times is referring to an internal review found that weeks before smith's public resignation, he complained about his bonus and said he deserved to be paid more than a million dollars. the book, paid $1.5 million for the book. it's all a little -- >> we're saying it's all based on whether they call people muppets. that would be okay if you were doing -- fit's not beg bird, here we are talking about municipmuppe muppets. it's probably like not being client oriented, right? if they were doing everything for their clients but still calling them muppets, it wouldn't be an infraction, would it? >> if he was great for the clients -- >> could be a term of endearment. >> if i called you a muppet, how would you feel? >> i'm not one of those old guys
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in the balcony. i like those guys. andrew, what are the chances that braunstein goes to goldman and vineyard goes to jpmorgan zero. >> its it's like a wife swapping thing. >> vineyard is going to california to rest.ts it's like thing. >> vineyard is going to california to rest.s it's like thing. >> vineyard is going to california to rest. it's like a thing. >> vineyard is going to california to rest.it's like a thing. >> vineyard is going to california to rest. braunis the braunstein is just taking a different office. >> come on over. take your shoes off, settle in. s&p cuts spain's rating to bbb minus. if it goes below that, it's junk. which is -- i don't know what i was more surprised with, that they cut the rating or it wasn't junk already. it cite as deepening economic recession and limiting the government's policy options to stop the slide.
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and italy sold 2.9 billion of three year bonds that it no longer issues on a regular basis. that's the top of it targeted amount. kelly evans will join us with more in a few minutes. christine lagarde is calling for urgent action. ties are similar. >> very similar. >> to tackle the european debt crisis and spur sluggish growth. she praised recent steps but said no more needs to happen -- or more needs to happen and faster. the imf and world bank's annual meeting are taking place in japan this week. and the bank of korea is cutting interest rates and growth forecasts, but policymakers are predicting a recovery ahead. yesterday woody i asked him the tebow -- they love these like bloggy looking for conflict,
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they love the idea that i changed the subject to talk about his tie. woody gave me the tie. not one of these outfits, and i put it on, so we came back in break and i was wearing woody's tie. not a single outfit said, wow, but look, after the break -- they're not smart enough any of these places to see that. just smart enough to try to write their own -- >> i to have to say, you caught my attention with the question. but woody laughed at it. >> here's the question. it's nobody's business. why do i know that tim tebow is a virgin? why do i know that? why do i need to know that? i didn't ask for that. he's made it an dobundantly cle. there's women everywhere, he's a quarterback, he's a stud. inquiring minds want to -- is it really -- is it that horrible, really? >> could i make an argument that it was a business case. he could market himself based on that.
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>> exactly. do you know who is mad at me? the news busters. the conservative not media matter which was is usually the one. they will eye write -- they're the most flagrantly -- >> they are a liberal journalist. sgr news busters are mad because they think i was mocking his christian faith when it was just a throwaway. anyway -- >> i imagine you'll compliment everybody who comes on for their tie now. >> the funniest thing was that i think it was tmz, which they're clueless and none of them have ever made a stock because they make 20 grand a year. but that's neither here nor there. but they wrote it was guest host richard lefrak asked woody whether tebow was still a virgin. poor richard. he was just here minding his own business. >> collateral damage. >> for the rest of history on
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tmz, it would be richard lefrak asked woody johnson -- maybe the camera wasn't -- >> i think it was a side shot. it was hard to see. >> they spelled "squawk box" right and they actually spelled kern kernen right. but they can call you aaron sorkin, good. mr. did you see the made up conversation? that was hilarious. and they got everybody kind of right. >> they did. you said i just simply shouldn't be doing this. oh, sorkin, you never want to do anything that's awesome. yeah, but i don't think it's the right way to approach it. >> you were in it, too. oh, you can't say that, i'm going to turn red. i can't be on the set. >> but the conversation -- >> they made up a conversation between us before the show as if we were planning to ask that question. >> and then the best what's her
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face, i don't know -- she has written stuff using the most terrible language about warren buffett and then something about what i did to tepper in terms of -- on air -- she was writing the worst things. she was kind of funny. she said i asked the question everyone else was thinking. >> exactly. >> so is this looking at different muppets, what do you think about fozzy bear? that would be kind of good, right? >> i don't know what -- >> do you know fozzy bear? >> it might be better than honey boo-boo. she's the biggest thing around at this point. >> snooki is out of the picture. that's why. >> i think they're related way back. i think if you do the tree. >> maybe not so far back.
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let's take a look at the markets. another triple digit loss yesterday. futures are indicated higher this morning, but this is three days in a row that we've seen down dais for the dow, four days in a row losses for the s&p and futures indicated modestly higher. oil prices -- let's take a look at the european markets. same story there. ftse up by about 25 points. france the cac up by half a percentage point and germany, the dax up by 48 points. oil prices -- or we're going to asian markets. and you see in japan, the nikkei closed down by about 49 points. hang seng was slightly higher. take a look at energy prices. you'll see oil up by about 66 cents to $91.91. i don't think we're going to the dollar next. ten year is yielding 1.691%. slightly lower.
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and then the dollar, down across the board. euro-dollar at 1.2881. flip the board. gold up about $6. $1771 abo $1771.10. >> it is now time for the one and only global markets report. kelly evans standing by today in london. haven't seen kelly in a day or two. had ross filling in. good to see you. >> andrew, good morning. and there is green behind me for the most part as we take a look at the europe stoxx 600. we had s&p downgrade spain's rating status. some initial reaction, but not a huge response. the question as to why spain should maintain an investment grade rating at all.
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take a look at the bond wall. ten year higher. we had seen the yield fall back quite a bit even this morning. earlier on "squawk box" europe, head of european sovereign ratings called in to explain the move and here's what he had to say. >> the perceived commitment of eurozone commitme eurozone governments to mutualize the programs have been put this to question very much so, actually fairly clearly rejected. and we think this is a destabilizing factor in the country's credit outlook. >> so again that destabilizing factor that he's worried about is the fact that some of the northern/core european countries were backtracking on using the esm to rescue spain's bank. this morning saying all the options still being explored, but not giving a time frame for that bailout and that of course is what markets want at this
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point. ibex 35 down about 0.4%, but it was down almost 1% earlier this morning. so it is walking back those losses. and still the question comes down to spain and when it will ask for aid here. cac 40, xetra dax, both up in the range of about half a percent. ftse 100 up 0.4%. burberry shares today after it comes out with figures showing there was strength in other regions including hong kong, germany and i believe france surprisingly enough is seeing a rebound. shares up 9%, that still leaves them roughly 20% below the levels we saw last time. and just want to finish by showing you gold up 0.3% yesterday. the reason why is we had scott minerd on -- says just give it
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time. back other to you. >> the s&p 500 managing director when it comes to spain, did he give any indications as to what it would take foam this to actually cut it another level to junk status? >> not specifically, but i know what they expect will happen is knowing that there will be some support for those bond purchases by the european central bank. so you can imagine that if that suddenly were to come off the table, they may feel differently. but again, you know, the fact that we're even having this debate when we're talking about a country applying for frankly a bailout just goes to show the difficulty with which you try to rectify that move with what spain's rating should fundamentally be. and of course it is moody's by the way that we're all keeping an eye on on because once they -- if they downgrade spain to junk status, that does tart to change what investors can do
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not just for exposure to spanish sovereign, but a lot of corporations. if you think of a lot of countries headquartered in spain, that starts to change the exposure that a lot of funds can have. so that's why it's becoming a concern, not because it's telling us necessarily new information, but just could actually be a significant game changer for those companies and even for spain itself. >> a great point. kelly, thank you very much. >> we'll get to harwood in a second, but i'm getting the impression that sports are a big business in new york. are they not? the lead sports story in the post on cnbc "squawk box," did you see that? yeah, about woody johnson was on cnbc "squawk box." >> did they put a u in there? >> no u. it's all good. quoting woody.
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very awesome. and the "daily news." so we know what we're doing around here. and then i was thinking something else. all right. so i ask him the question, virgin -- we are in a society where celebrities become celebrities by leaking sex tapes. of themselves. i mean, this is just words. this is so -- >> you're the not announcing that you have -- >> no, there's no tape. there is no tape -- >> that may have been -- >> although we do have an overhead camera in the stall, andrew, and i have some bad news. it's debate night -- that's bad. it's debate night in kentucky. that's where we'll find our john harwood. john, with sports with you, i could go so many places whether it's redskins or nationals. i had a rough night last night. that first -- from the night before where they threw that guy out at third.
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and then they had to bring up mf-i mean, this thing is like a nightmare for me. and now one game to try to salvage it. how are you feeling sports wise, are you all right? >> i'm hoping the nationals can find their know skroe back again tonight. they have ross detwiler going. he's a left hander, pretty good. and he needs to come through at home where he's pitched a lot better. but i have to say, i didn't hear all of your previous segment, we have a little delay. but let me tell you, you better not come here to my home native state of kentucky and mock anybody's christian values or do all that sexual innuendo stuff because you'll get run out of town. >> i'm from cincinnati. yeah, that wasn't -- i've been away for a while. and i didn't realize that just -- it was just sort of a throw away -- i mean, he's a quarterback in new york city at this point. they made a movie called the 40-year-old virgin, john. i mean, it's like -- i don't know. i'm not mocking it. i'm not mocking it.
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my unwascle was a priest. a good one. anyway, we can either go with that the point that you you wrote the column that vachlt p debates do matter or you probably want to talk all about the swing state poll that we have. >> well, let me do both because the swing state poll set up the debate. first of all, what we've seen nationally is that mitt romney's vote is coming up. he's he closing on obama. he has taken a one point lead in the state of virginia. we've got obama up one point in the state of florida. but those are essentially tied races. the real key for romney is going to be making some more head way in the state of ohio where we show obama up six percentage points, but that's down from eight before. and we've seen romney elsewhere making progress in places like colorado, for example, where obama had held the lead, but mitt romney was in striking
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distance and he still is. now, the significance of tonight's debate is that vice presidential debates can either confirm and accelerate momentum from the previous presidential showing or put a brake on it. joe biden's job is to put a brake on it and paul ryan will have to keep it going. and when you think about match-ups between veteran politicians like biden and younger vice presidential nominees, we've got some pretty good case studies. one is lloyd benson against dan quayle and lloyd benson had one of the historic smackdowns of quail. but ryan has an entirely different political persona. he's very much a policy geek, he's very much on top of substance. and so i think that's not going to be easy for biden to do. one analog that might be useful is dick cheney and john edwards in 2004 when john kerry had built momentum against george w. bush and dick cheney sat down
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with john edwards and kind of portrayed him as a light weight who hasn't been around, who missed a lot of votes. cheney projected some sgchlt ravitas and did george bush a virs. and president obama is hoping joe biden can do that for him tonight. >> i was wondering if you're going to ask that question, are you ready if something god forbid were to happen, a heartbeat away, do you make that point with paul ryan when the republican caricature of biden keeps pointing that out? this guy is heartbeat away from the president? it depends which side of the aisle you're on as to who wins the argument. biden has been around a long time, but you don't need to
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be -- you can be a relative newcomer and be more prepared to perhaps step into that job if you needed to. >> i think there would be -- there could be some utility of that argument for biden because ryan lacks foreign policy experience. but because ryan has a reputation as somebody who is bright and intellectual leader of the party, i think that will not be as potent an attack. i will say i talked to both bob dole and dan quayle and they said two things that i thought were useful. one is quail said, look, yes, biden makes mistakes, but he makes mistakes when he goes off message and freelances. he'll be very disciplined in the debate tonight. >> i think he voted for the war but voted against the surge. and then he was on record, he wanted to split the country into three -- he's got some foreign policy stuff that looks -- i was wondering in the poll and you didn't mention real clear,
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romney was up suddenly and real clear on the composite of all the that is al polls and it's widened to 1.5%. and some of the other ohio polls, it's closer than that one. in any of these polls, are you seeing an improvement because of the front page of the journal that it's one month since benghazi at this point. i wonder if you're seeing the foreign policy advantage that the president had, whether that has narrowed. do we ask that question in any of our polls? >> i don't think benghazi was on the poll. i'll go back and look because i didn't focus on that, i was looking more at the top line. but, yes, i think that has. but i think the biggest thing that's happened has been the debate last week lifted mitt romney's favorable ratings among a lot of people. and so what you had was a lot of either soft p republicans or independent leaning republicans who for one reason or the other had decided that mitt romney was
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not their guy, that they were not warming up to him, the debate took some of the shackles off those people and lifted up his vote in that way. i warrant to make one other poi. bob dole told me he thought joe biden is going on to come out of this debate swinging from the opening bell and he's not going to let up the whole time and the question will be how effectively can ryan perry those blows even though usually vice presidential debates don't move the needle at all, bob dole told me this is one where the race is so close, it might make a difference. very small, but it might make a difference. >> one of the reasons they picked ryan, he's so affable. and we've had him -- i won't say we made him here on "squawk box," but we certainly over the past couple of years, he was on many, many, many times. and i've seen people come at him really hard and he's pretty unflappable. and he's got kind of the smile, kind of shrugs it off and then comes back with a lot of -- so i
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don't know. i can't wait. i can't wait again. i can't wait for the vp debate. if they were -- if i could go to sub hub, i don't know what i might pay to get an actual seat at this thing. >> joe, the one time that we've seen paul ryan on the national stage, he purchased very well at the republican convention. >> somehow we're late again. me and you, i think it's our fault because we got sports, all this to talk about. john, thank you. don't miss the coverage of the debates right here on cnbc anchored by our own becky quick. >> and carl quintanilla will be there. live coverage coming up. we're excited about it. >> are you coming in tomorrow? >> yeah. >> what time are you done tonight? >> 11:00 or 11:30. we're not sure yet. so i'll be on my toes tomorrow.
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>> you can always oversleep. >> i've done that before. when we come back, we'll have your morning sports report. a round up of last night's baseball playoffs. and don't miss steve liesman sitting down with lloyd blankfein, alan simpson ande ersskin bowles live at 12:30 p.m. eastern.
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in sports news, giants -- this started bad and got worse. beat the reds 8-3. the series is tied at two games each. supposedly i love fifth game or seventh game to decide the series. >> i figured last night was cutting it a little too close for you. >> every pitch, every foul ball. anyway, people are excited in new york about the yankees defeating the orioles 3-2 in extra innings. a couple of home runs in the ninth and the 12th. >> etwo games to one lead in th series. a bottom of ninth home run. and homered again in the 12th. first player to homer devices in a postseason game in which he didn't start. >> and he's 40 years old. >> wow. that's amazing, too.
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i i shaw some comments about pee rose about a-rod that he's never seen a-rod not run out a fly ball.i saw some comments about rose about a-rod that he's never seen a-rod not run out a fly ball. saw some comments about p rose about a-rod that he's never seen a-rod not run out a fly ball. pete always really hustled. he said i don't see how a-rod gets criticized. actually rose because talking about whether jeter can catch him in total hits. anyway, now to the national weather forecast. reynolds wolf joins us from the weather channel. reynolds, what's going on? >> we'll get you started with what's happening in the northeast. it's a pretty nice morning. you had a rough day in mitch yesterday. a little bit of hail today. got a little bit of rain will, but in parts of the northeast like in boston this morning, you got a temperatures in the 50s but headed for 58 degrees outside fenway park, 60 in philadelphia. for new york to be specific for the city, what you can expect today, temperatures going to 53
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by noon. we can expect a few more clouds into the afternoon and evening. temperatures going up just a little bit by 6:00 p.m. popping out around 55. and then into the late night hours, we can expect skies to be hazy, but then the clouds moving in around midnight. 52. from the northeast out to the west, that's really the sore spot in terms of rough weather around the country. we have the heavy rain, strong winds. might have backups for you at l.a.x. where temperatures today expecting to go to 70 degrees. along the channel, heavy rainfalls. san francisco, scattered showers there possibly, but that should kind of give way to some pretty between conditions in the afternoon. and the mys in nevada, thunderstorms to deal with and that may be the situation in reno. but for l.a., scattered showers and 67 degrees. by nighttime, we're going right back down into the low 60s. possibly some marine layer by tomorrow morning.
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that's a quick snapshot of your forecast. back to you in new york. >> thank you very much. by the way, the holiday shopping season, if you're like me, you probably have the same feeling. just seems to get earlier and earlier every year. ce off of shark media joins us for his forecast. it owns retail me not and are we right about this whole idea, is it getting earlier every year? >> it really is. we just did a poll that says 40% of americans have already started their christmas shopping by november 1st and 30% are done by black friday. >> what about in terms of the offers from the stores? we tend to think that black friday is the best day that you can get any shopping done and they do give out some really great compelling bargains. is it the best day in terms of the best bargains that you'll get? >> it's certainly a great day and a great day for what i would call things that attract your attention, big loss leaders,
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dollar tv. but consumers have reported to us that the most savings they had last year was on thanksgiving day. >> target went early last year. a lot of people thought -- a lot of people were irritated that people would be forced to work that day or that other people would be kind of luring them out on thanksgiving. is that more the trend this year, he though? >> exactly. if they were irritated last year, they'll be really irritated this year. >> what is driving this? >> we have a joke in my family, my wife and i have separate checking accounts and one of the reasons is we always felt like it would be a race to the bank to get all the money out of the atm if we had a joint account. i think the same is true with consumers. they only have so much money they'll spend on the holidays. so the sooner you can get them to spend it at your store, the better. and the more of a guarantee you have that you'll get your percentage of their spending. >> what did your poll find just in terms of how consumers are feeling and how many they're
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planning on spending this holiday season? >> 7 in 10 consumers feel like the economy is abysmal. only 3% felt like things were going well. and one in four american parents felt like they weren't going to be able to buy everything for their kids that they wanted this year, which is depressing. the other thing that's interesting, national retail federation came out with a study saying spending will only be up at around 4%, and that's at around $600 for a family. so don't expect big increase in spending this year. >> cotter, thank you very much. appreciate your time. >> thank you. coming up in just a bit, the s&p is coming off four straight days of losses. we'll ask scott nations in the bulls can turn that trend. but first as we head to a break tar take a look at yesterday's winners and losers. [ male announcer ] the 2013 smart comes with 8 airbags,
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♪ scott nations joins us from the futures pits in chicago. i watched and read a lot of commentary, scott, yesterday about that move in the averages down. and it's turning in to a little bit of a trend here. and the in an analysis was that earnings even though we knew they were going to be can disappointing or at least people said they were going to be disappointing, that we've said that so many times for the past five quarters or six quarters that people thought it was
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crying wolf. and eshings would not be disappointing. but now with the few that have come out so far and the china concerns, people are starting to say, you know what, there is an air pocket. it's ahead of itself based on where companies are reporting earnings and it's up there because of qe-3. >> i think you're right. i think you mentioned actually the really important name and that is cummings, disappointing forecast from cummings hurt a the lot of big names. for example, caterpillar in china. you can look at yum brands, they had great news out of china, they'll continue expansion and they'll expand into india. so i guess in you're selling fried which i can nn china, you're in great shape. but if you want to sell big equipment or automobiles, all the car companies have been hurt recently, then you're in trouble. and let's face it, we can't turn our economy around based on selling fried chicken to the
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chinese. we need to sell them airplanes and excavators and cars and lots of big equipment. so i think that for the broader economy, i think there's a lot to be worried about in asia. >> the coefficient of correlation for heavy equipment and fried chicken is probably -- could you pick any two things that would be more correlated than that. to say things are doing a little bit better in china because they're able to sell a few pieces of fried chicken, that's not even close to long term capital investment needed to continue the china growth story. >> that's absolutely right. and with china growth below 8% and probably well below 8%, they're not going to be buying any heavy equipment or airplanes or -- >> even cars. even alcoa with the aluminum and -- i don't know. that is worrisome. but i don't know. does it matter, scott? we don't cook the books here in this country, but they do over there, right?
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is there something -- if they tell us eight, is it at least 6 1/2? >> i don't think it's quite that bad. i think they're opaque and we're not entirely certain how they crunch the numbers. they're not always as forthcoming as we might like them to be. so i think you have to take the numbers with a grain of salt, so much that they're not cooking the mobooks. >> broiling them or microwaving them. >> maybe they're deep frying them -- yum brands is deep frying them. but probably the good news for us is actually ironically outoff europe right now. we're in the witching hour when it comes to europe. and bad news out of spain is good news because it will push them towards requesting a bailout. the stress tests were good news and it seemed like they said, well, thousanow we don't need a bailout. so the s&p town grade downgradey
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the opposite sort of thing. >> all right, scott, thanks. when we come back, the book on the gold prices.
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welcome back to "squawk box." time to present a blue chip book award and it goes to the prize, written by dan yergin. being called the best history of oil ever written. the author received a pulitzer
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prize. we're hoping the prize stacks up and we're pleased to welcome dan to the set. of course dan is also the author of the quest and commanding heights. and i believe you're a cnbc contributo contributor. so thanks for being part of the team. >> i thought that a book called the prize could never win the prize, but it was strategic mistake. >> when you wrote the book, what did you think was going to happen? this became a very big book, but if you had asked me a f. a book about oil was going to get the bu pulitzer prize, i'm not sure i -- >> i looked at the prospective i wrote seven years before publication and i said when this book comes out, oil would be front page news. little does i know it would be the gulf crisis. second week it went to number one. >> timing is everything. >> and i said i was just five
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years late. >> so when you think about what's happened in the world both geopolitically and frankly just with the price of oil and what's going on in china and that you wrote a second book, we often ask authors if you could rewrite your book today, what would you do. i can't ask that you because you did it. what do you think of biggest takeaway is close to 20 years later? >> i think it continues to be oil and how tied up oil is with geopolitics. just when everybody sues as they did kind of in the 1990s, old industries got involved, then comes all the middle east, 9/11, iraq, and what we see today with iran. so for me, that is a very fundamental part of the story. >> fracking. big part of the story now? >> yes. i mean, we're living through a revolution. >> but not a big part of the quest. >> yeah, it's -- in the quest i have a chapter called unconventional gas revolution and it talks about the unconventionals in terms of oil.
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but five years ago, we were destined to be a major importer of liquefied natural gas and now we're having a debate of whether we'll be an exporter of natural gas. >> so what does it look like 20 years from now, 30 years from now? >> i think we'll see world oil demand will increase by something like 20%. oil demand in the united states will have gone down. imports will be a lot less than they are today. they'll be cone secentrated in h america. but the big growth is chinand t and the other emerging markets. >> do you have any hope that renewable energy will become a real thing? >> i think it is a real thing in the way that -- in the quest and i have chapter tallcalled the rebirth of the renewalables. last year the renewable electric business was about a $167 million business. still small when you measure it against the overall energy industry and it has two big headwinds, one is the economic downturn. governments don't have the same
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money. and number two is the competition from natural gas at least in north america. >> so becky has a view, she's talked about it on the show, about natural gas exporting and what that -- >> i've been warned. >> i will admit, i don't know how strongly i feel about it, but i do have torn feelings when you start thinking aboutle natural gas, exportation, i realize it's a great thing and it would help boost some of the prices so that people who have been investing the money to do it makes it more worth their time. but then there's also the argument that we want to be energy independent and maybe the best way to do that is to hold on to our own natural resources like china would do. they look at that time veit ver differently. >> our natural gas market is constrained by demand, not supply. the only thing that we're not independent in really essentially is oil. and i think we'll see there will be a report from the department of energy just after the
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election about this very question of exports. but it seems to me that we've gone around the world for decades now sawing we want free trade, open trade and energy. and we've said to the japanese import less oil from iraq and by the way have this disaster with fukushima. so it would be hard for to us say that we're in the going to export gas to other people. >> i think there's like a ten commandments of free markets and global alization. >> i'm going to break another of the commandments. >> you break them every day. >> if i was paris, the whole conversation was about carbon taxes and what's really going to happen. what do you expect will happen? >> i think in this country the likelihood of a carbon tax anytime soon is not there. >> we'll wait for china and
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india. >> clearly over the next five years or possibly ten years there will be no appetite here for that, but given what -- i'm telling you, the view is a complete -- >> their energy policy is primarily a climate policy. >> you don't even need -- it's not co2, andrew, we'll know within five years. >> some people say it doesn't work. >> i have six chapters on that subject in "the quest." so i think dealing with carbon, the carbon has gone up. >> 400 parts per million. >> that's right. >> that means there's 9.9 -- 999,999.99999999 carbon dioxide. chill. it's eight-tenths. >> i'm chilling. i'm just telling you. >> that's the problem, we're not chilling, we're heating. >> dan thank you for being here. >> thank you. >> we have to put this on our bookshelf so we need a signed copy.
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>> let me just say thank you, i'm honored to have this award. >> what are you going to do with it in. >> i'm going to frame it if there's -- is there a thing? >> hold on, welcome, this is, we had a whole thing here. >> so don't think you have to put it next to the pulitzer prize but put it somewhere? >> the pulitzer prize is really small. my 5-year-old daughter took it to kind gaergarten to say her father got the prize. she held it up and everyone said "that's so tiny." this is much better. if she was still in kindergarten she'd take this to school. >> if you sign that up we'll put it on the bookshelf. >> thank you. when we come back if you ever wanted to play hooky, we have the best ex-kups cuses for calling out sick and the worst excuses, right after this. bob... oh, hey alex. just picking up some, brochures, posters
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copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners. a short word that's a tall order. up your game.
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welcome back, everybody. if you ever questioned whether or not your co-workers were actually sick when they were calling in, well, career builder has the answer for you. they did a survey and it turns out 30% of people admitted that they call in sick when they're faking it, when they really -- >> routinely they do this? >> no, but 30% of them admit that they have called in with this. >> once, at least once. >> at least once. employers say that they do
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notice an uptick in sick days around the holidays, which always makes them a little suspicious, too. 20% of them said that the most, the biggest callout month is december, the second biggest callout month is july when people like to take vacations. >> sometimes you go on vacation and get sick and you come back, are people not going to believe you got sick. >> i have the opposite problem. >> you come in when you're sick. >> right. but we have a unique thing where if we don't come in at 6:00, who is going to come in? the show must go on. you ever heard that expression? we have to do this. those things are going to come on and think if we're not here and the red light comes on and -- >> empty desk. >> take that. >> besides if we have germs -- we share everything. real quickly, guys, the top three worst excuses, one is an employee called in to say the sobriety tool wouldn't allow the car to start. another was an employee's toe
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money matters. [ bell ringing ] evercorps partners chairman and today's guest host roger altman weighs in on europe, the u.s. markets and presidential politics. debate day in danville. the countdown to the vice presidential debate tonight in the bluegrass state. rnc chairman reince priebus on how to keep the momentum going to election day. and earnings season is under way. we're keeping you ahead of the game and focused on what the street is watching as the second hour of "squawk box" begins right now.
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good morning, everybody. welcome back to "squawk box" on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. take a look at this morning's line-up. our guest host roger altman is here, just walked onto the set, he'll be weighing in on europe, the fed, politics and much more, in just a moment and in about 15 minutes we have republican national committee chairman reince priebus, he'll be joining us to preview tonight's vice presidential debate. at 7:30 eastern time morgan's largest bank cap analyst joins us with a preview of earnings. those numbers out tomorrow morning along with wells fargo. at 8:00 a.m., former senator ted kaufm kaufman, he's been prepping vice president joe biden. hey, andrew. >> hey, andrew, it says hey, andrew, i'm reading "hey andrew." thank you, becky and good
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morning. take a look at the futures, dow jones looks like it would open 35 points higher, s&p 500 5 points higher. home foreclosure filings fell to a five-year low in september the second straight monthly decline according to figures compiled by realty track. foreclosures were down 16% from a year earlier. standard & poor's cutting spain's debt rating by two notches, putting it at bbb minus, one level above junk, citing the deepening recession in spain. california retail gasoline prices are finally beginning to fall from record levels but remain 45 cents a gallon above where they were a week ago. refiners have been given permission to produce winter blend gasoline earlier than usual to ease supply disruption so we'll see where that price goes. now let's talk about jpmorgan this morning, we talked about it earlier, the fallout over
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jpmorgan's trading blunder may be forcing the company's cfo to step down. cnbc's kate kelly joins us with more details. >> thanks, andrew. doug bronstein, cfo for two years, he came in 2010 is stepping down from the cfo role. he will stay with the bank, one action is to go to investment banking role. previously he had run their investment barvnking practice. lot of people think of him as an m&a guy. he's the latest to be associated with the wales situation. last week we learned about the retirement of barry zubrow, he had gone to a more senior role in recent years, another who had oversight and living and the cio, ina drew, resigned in the immediate aftermath of the $5.8
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billion loss. you see a situation where jamie dimon has survived, been apologetic, up front "it was the dumbest thing i was ever associated with" et cetera, et cetera and gently having these people resign or move into different roles. it's almost, and tell me if you agree, a goldman sachs style way of dealing with things. obviously if someone has a huge blunder on their exact job they gotta go. other than that it's a slow and gradual and very civil kind of peeling off. >> he's not throwing people off the plank immediately. i think the bigger story and i don't know how you feel about this, morguen is a different firm than it was four years ago that when you think about barry zubrow no longer in that position, steve black no longer there. >> good friend of jamie's. >> you could go through the list, everybody who was running that firm during the financial crisis is either not there or in a different place now, and what does that say about what jpmorgan is? and jamie dimon will be the
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first to tell you he may get too much credit when things go well and probably too much credit when things go badly but ultimately it's about the team. it is a different team now and what does that say about the firm? i'm not saying it's a good or bad thing. as an investor if you're investing in jpmorgan and continue to be investing in jamie dimon you are investing at some level in a different group. >> except for jamie. i agree, it's a completely different firm, completely different faces at the helm. to me the most significant move probably happened two months ago when we did this big reorganization, reorganized the business lines, elevated a lot of guys but two guys regarded as now the potential successors, matt zames, now in the coo co-role and mike cavanagh, a former cfo like braunstein, he and danielle pinto are sharing a more senior job. up until now it's not that dimon didn't have a good bench but i don't think had been telegraphed
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as the possible future coo. now we're seeing the body language clearly. >> kate kelly, thank you so much. maybe we'll talk more about that with roger altman as well. let's talk about the elections and the primaries and everything that's going on, not the primary the rather, the debates tonight. after mitt romney dominated the first presidential debate tonight's vice presidential debate, hosted eed by becky qu and jim cantore is must see tv. roger altman joins us now, good morning. >> hi, andrew. >> thank you for being here. >> thank you. >> what do you expect? what is biden and ryan going to do what would you tell them to do? >> first of all i think it will be an interesting debate and by past standards of vice presidential debates perhaps as john harwood was saying earlier an important one. it's an interesting contrast, vice president biden as we know is very experienced, i think
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he's very good at this type of thing and i think he's avuncular and much older than paul ryan, who is -- >> should he go for the jugular? >> i think he will be very aggressive. he'll be aggressive because i think that's his style. he'll be aggressive because he'll want to counter a sense that president obama was passive in the first presidential debate, and i just think he'll go for it as john harwood said, from the first moment. >> is kentucky far enough south for him to use that accent, the southern accent that he uses, do you know? kentucky fought for the south, i think, right, but ohio was -- i'm just wondering. why are you laughing? >> i've never heard vice president biden use a kentucky accent. >> not a kentucky accent, the southern one. >> he's not going to be any different tonight than if the debate were in alaska or florida. >> if there's one point, ifadvie
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point for obama or biden to get back into the game, there's a sense the tides have turned at least somewhat, what do you tell him to do? >> no one has asked my view and i'm not qualified to be asked for my view, andrew, but i think there are two primary attack lines you would think about. one is to walk the audience through the positions which the romney/ryan ticket has taken for 99% of the campaign so far in the last 18 months on tax cuts, on obama care, on dodd-frank, and by the way, on women's health. that's number one. number two, i think would be to raise the question perhaps at the end of the debate or make the point that each of these two guys on the stage is a heartbeat
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away from the presidency and therefore for the audience and the nation watching, how do they feel about the fitness of each of these two to be on a moment's notice the president of the united states. >> roger, what about the question that came up again and again at the beginning of the presidential debate which is you say it's a $5 trillion tax cut, romney said it's not. he said it was this, it's this back and forth. does biden have to say here's what you're saying right now, which is you'll bring down rates but at the same time you'll be closing loopholes. how do you get into that and what's the winning strategy with it? because the back and forth was -- >> again, becky, nobody's asking me but i would be a little different than you just suggested. the reality is that the position they took on this up until the first presidential debate right around the first presidential debate but took on it every
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single day for 18 months was that we should have a 20% cut in marginal tax rates across the board and that that, we can do that on a basis which won't increase the deficit. that was their position as i said for 99% -- >> but still his position -- >> hold on, joe, and you cannot do that as a mathematical matter without raising the tax burden on the middle class, it's not possible and all this debate about my studies and your studies is not possible, as bill clinton said at the democratic convention it's arithmetic. >> can we taxle the deficit without affecting the middle class? >> if i were vice president biden i'd put that back on the table and push it because it's too late to change your position 30 or 40 days before the election in a campaign that's gone, you know, for a year and a half. it's too late especially on an issue which you've been talking about every single day for those 18 months. it's too late. i'd take the view you can't change your position on something like that 30 days before the election, you can't
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change your position on repealing every fapset of obama ca facet of obama care or every facet of dodd-frank. we have a debate tonight, so to say nevermind, that doesn't work. you're asking me from a biden point of view. >> i understand, but you can't -- is it fair to ask president obama how he's going to deal with the deficit if we don't eventually look at broadening the base and including the middle class? because there's been studies done that show you can tax the people that the president wants to raise taxes on, you can tax them at a marginal rate of 100% and still not accomplish what you need to accomplish. >> the president has a budget, it's out there, everybody can see it. >> the one that got zero democratic votes? >> hold on, he has a budget. >> that one? >> and it's really quite clear. from memory it's $2.2 trillion on the spending side, the high
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earner bush tax cuts expiring. about 400 million more than the 2.2 on the mandatory side for a total of about 3.5. you can debate whether that's going to pass or not pass in a new congress if the president's reelected, but it's out there, and everybody can talk about it and assess it and like it or dislike it. i happen to think it's pretty reasonable and i also happen to think it's going to resemble pretty closely what ultimately is done to avert the fiscal cliff. >> even domenici, rivlin, even simpson-bowles, we athey're not telling we can have our cake and eat it too and get the rich people to cover the problems with our deficit and spending. even they say broaden the base. if you let the bush tax cuts expire as a whole, 80% of our deficit problems are taken care of with that, and it's an actual
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number, it's not 40 billion a year. it's an actual number. >> then you're raising taxes on the middle class. >> right, you're broadening the base. you're not going to be able to do that without -- >> but obama and romney pledged they don't want to raise taxes on the middle class. >> is it a realistic idea two years from now, three years from now? >> that's an important question, because as much as so many people, and i'm one of them, admire simpson-bowles and admire particularly i think the heroic contributions, and they really are, that alan simpson and erskine bowles made to get us close to a the resolution, it is a sweeping tax reform, and historically, tax reform has taken in the modern era years to do. the '86 tax act, the last time we had major tax reform in this country took four years to do, first introduced in '82 and so the idea that in the lame duck session we'll have big tax
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reform for the first two months of 2013 -- >> bowles and simpson would say get it on the table and get it rolling. >> if you told the truth about entitlements instead of you can have everything you want and don't need to do anything, maybe the middle class taxes wouldn't have to go up if we means tested it and did all of the different things we need to do. >> coming up on "squawk," what paul ryan needs to say tonight on the presidential debate, rnc chairman is going to be joining us to talk all about this, taxes, swing states and mitt romney's plan to win the white house and later more on the future changes at jpmorgan, we'll talk earnings and find out if the stock is a buy. "squawk" is back right after this.
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it is the vice presidential debate tonight. i don't have to read it again. you know who's there and who is going to square off tonight. here is a preview of what we can expect out of the gop vp. lot of alphabet soup. reince priebus is the chairman of the republican national committee and mr. chairman it's good to see you this morning, trying to figure out where to score -- i've seen you around a lot and you know, we love
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hearing your side of things and then i see debbie wasserman schultz around and we hear that, and sometimes we get buried in talking points and i wonder if there's a law of diminishing returns but we're going to go here anyway and i'll start with what roger altman just said was that mr. biden needs to point out that 99% of the romney positions changed at the time of the first debate. now is that accurate in your view? >> no. listen, i don't know where this stuff's coming from. i've been on the road with governor romney. i've been watching all of these speeches. i know what his positions are. i've heard about governor romney and paul ryan have been talking about their five-point plan for months, education, energy, trade agreements, debts, deficits, small business. i mean the reason i can rattle them off isn't because i'm studying them on a piece of paper. i've heard them talk about this for a long time, and as far as
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this sort of, you know, transformational story that's out there, it just isn't true. he is who he is and he's been that person the entire time and what you saw on the debate at least last week were two guys that were unfiltered. the american people got to see that for the first time, and i think they liked what they saw about governor romney. he's not the guy that barack obama is trying to paint as some, you know, evil guy who wants to, you know, raise taxes and not have any way to pay for it. the people have seen that's not the case, and so i think that matters. i think people want that kind of real, authentic debate and i think they're going to get that tonight again. >> you know, reince, one of the points roger was making was the tax plan was a little different, there were more details than
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many people heard before, maybe that is what caught president obama a little off guard, it was not the argument that he had necessarily prepared for. was that part of the strategy to say okay, we're going to open up and tell a whole lot more at this moment? >> no, i don't think so. seriously, i mean, this is just not the case. i mean he i think had the strategy, though, to set the record straight, and i think that's important, to come out of the gate and say wait a second you're not going to misrepresent my record and put words in my mouth. this is what i believe in and here's why it will work for the country. >> reince here is the issue on the taxes. for many months it sounded like he was suggesting i'm going to lower taxes across the board by 20% and as a result of that, by the way, i'm going, to the extent you believe lowering taxes is going to increase growth because it will release a lot of money into the system that that's going to happen. it sounded like what he said last week was i am going to lower the tax rates but because
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of the deductions i'm getting rid of your effective tax rate may not change at all or very much in which case it probably wouldn't have a huge impact on growth to the extent you believe that that argument was a salient one to begin with. that is the issue i think. roger in. >> i think the issue is close to that. >> well, no -- >> reince? >> i don't think that's the case, because you can close loopholes for people that are making over a certain amount of money, let's just call it $250,000, but you can protect small businesses in that tax plan, so that the growth that you're having is the growth that you want, which is small businesses hiring more people, having more people on the payroll, paying more money into the system. that's the type of growth you want, and so i think you can have targeted tax cuts in places that you need them without giving tax cuts to the super wealthy. i think that's what we're
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talking about. >> reince, what is congressman or candidate ryan focusing on, is it all domestic or, it's the one-month anniversary of benghazi and vice president biden is probably going to try to i guess put forth his foreign policy bonafi fides. ryan is not a policy guy. is he working on that in the preparation? >> well, i mean certainly. paul's been working on, been preparing on everything i'm sure so has joe biden and so i think both of these guys will be prepared. i think joe biden is going to come out, i think roaring, to try to make up some of the ground that barack obama lost last week but paul ryan is gifted in a lot of areas and i don't know if you've seen him a lot talking about foreign policy, but he's pretty good, i mean i think he's pretty impressive but the fact of the matter is we all know joe biden has been doing this since the early 1900s and he'll come out
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prepared and it should be an interesting night, two very different guys but i think pretty relatable people, both of them. >> i'd ask you more but we have to run. thanks for appearing today with us, reince. we'll see you again i'm sure between now and november 6th. >> thank you. up next, we have two nail-biting dramatic finishes in the american league divisional series, highlights right after the break. duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. if we want to improve our schools... ...what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ...nothing transforms schools like investing in advanced teacher education. let's build a strong foundation.
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let's invest in our teachers so they can inspire our students. let's solve this. oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners.
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send it into right field, base hit, seth smith is coming around and the oakland a's will live another day. game five is tomorrow! >> to say the oakland a's have a knack for the dramatic would be an understatement. bottom of the ninth, down two runs they tied it with seth smith's double before cocoa crisp's single. this was the 15th walkoff win for the a's, counting the regular season the fifth and deciding game is tonight. there was also some drama in the bronx last night. >> the yankees won in extra innings, and that ball is driven to right and we are tied! >> raul ibanez pinch-hit for
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alex rodriguez and tied the game in the ninth with a home run then in the 12th, ibanez smashed the first pitch into a frenzy that game ending solo shot gives new york a 2-1 series lead over the orioles and makes history at the same time. ibanez is the oldest player to hit a walkoff home run in the post season and the first player to hit long balls in the ninth inning and in extra innings in post season history. >> way to go. got to love the 40-year-olds. >> that was the bottom of the ninth. >> bottom of the ninth. >> forced a game five. >> how great are the baseball playoffs, they are the greatest. you didn't mention the giants coming down two from the reds. you've got one winner go home games with oakland and detroit, with the giants and the reds it's pretty -- >> that's what i said, roger, we do go through 162 games and sometimes maybe you watch any game on any given day and it's like ooh, baseball has lost its
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mojo for the nfl, but you go into the last game of a five-game or seven-game series where every pitch you're on the edge of your seat if it's a foul ball you see why baseball is still america's race. it's phenomenal. >> if you have any nauts about baseball, the playoffs tonight, go ahead and send them to us, follow us on twitter @squawkcnbc is our handle. up next, jpmorgan, a buy, a sell or a hold. we'll hear on the state of the banking financials overall after the break. don't forget you have earnings out tomorrow from jpmorgan and wells fargo. look at the futures ahead of the jobs number we'll get about an hour from now. right now dow futures up 31 points after closing down three days in a row. "squawk" will be right back. mike rowe here at a ford tell me fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer.
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welcome back to "squawk box." in our headline this is morning we are just about an hour away
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from two big economic reports, we have the labor department out with weekly initial jobless claims, they're expected to show a slight drop to 365,000 and the august trade deficit seen coming in at 44.3 billion, up from july. amazon has gotten fcc approval to sell its kindle fire 4g tablet. the company had not received the clearance and now it's got it. check out squares of sprint nextel, japan softbank talking about a two-thirds stake of sprint. nhk reported the original story and "the journal" says those talks are "advanced." it would be the largest foreign stake purchased by a japanese company on record and the stock is up 12% in the premarket. also a busy day for ipos, five are set for today, realogy
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holdings, intercept and kythera and shutterstock priced its offering above its expected range and garrison capital is expected to go public but not yet priced. >> it's a one shot on you, becky. >> i thought you had something you wanted to say. >> no, got nothing. the street eagerly looking ahead to jpmorgan and wells fargo, those companies out with earnings on friday and joining us on set with a preview is betsy graseck, morgan stanley's large cap analyst. what are you looking for? >> looking to understand how good the fixed income has been, how good housing has been and all the various ways it's impacting them, and then on the other side of the equation is nim, what's the forward look there. i this i it will be fine this quarter but how are you going to reinvest in a declining yield environment. >> if we needed a cheat sheet as we get the numbers as the press release hits out, what are ranges for these with morguen? >> we're at $1.16 for earnings,
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and if i look at the gap numbers it's $1.25, streets at $1.22 and street has gaap, non-gaap, 1.15 to 1.20 is good. anything above or below is not so good. >> same thing if you dig down into it in housing, fixed income, what are good numbers and bad numbers? >> so fixed income we're looking for q on q about a 6%, % better than last quarter, and for equity, right, equity is obviously going to be down a little bit, equity down somewhere in the 8% to 10% range q on q. >> is bringing back reserves to bolster the way results look, i am reading that everyone says that's what we have to watch closely, how much they bring back. is that again going to be something we need -- >> we are going to have reserve release and this is a function
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of improving economy housing getting better, so you overreserved a couple of years ago and now you're releasing them. >> they were aggressive with some of them. >> are they questioning the concernings, question the quality? >> people will take out reserve release, so you want to strip out reserve release from your numbers, about ten cents or so for jp, for wells a little bit less, so yeah, people will definitely pull that out but importantly, there is improvements happening in housing, so housing prices are going up. >> bringing them back is a reflection of something that is positive so it's not necessarily a bad thing to bring them back. >> remember the state ag settlement, we settle with state ags, and so the banks have been executing on their requirements to modify loans and as they modify, they're going to be recognizing losses and releasing the reserves associated with those losses so i know it's -- look, it's a little complicated
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but reserve release in our opinion is a cleanup. >> betsy, what do you make of the turnover in the management ranks of jpmorgan? what does that mean to the firm? >> so it means that they're moving forward. >> good thing then. >> i would say that it is -- look, as you are changing the management structure at the top of the house you are putting into place people who have been close to very difficult markets and you might say gee that's a lot of turnover in a short period of time. remember, we have had a, i would argue a generation's worth of experience in the last five years, so you're moving people into spots that have dealt with a lot of tension, stress and executed wealth. >> where do you rate wells? what do you think of it as a bank overall? >> we are overweight on the stock. we've gotten 88 cent estimate for tomorrow, i think consensus 87, there's some people with as high as 90, and wells, why are we overweight, because of the housing trade. so this is another one where as
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housing improves slightly, we've got an opportunity to benefit in particular from wells in the origination cycle. >> betsy, roger brought up terullo and the cap and the speech. >> yes. >> i hear that, it's like -- i don't know, reminds me of wage price controls almost where the federal government would say no, you can't buy someone. are we moving forward? are we happy about this? >> i thought it was significant because it obviously signals where the regulators or the chief regulator in this case as far as the largest institution is. >> is this good? >> i thought it was quite a significant speech. >> are you happy about it, roger? >> let's hear what betsy says. >> i would say that speech was extremely dense and had tremendous amount of content and so obviously the piece that we're focused on, that you're focused on is how large an institution can be allowed to acquire. i think the -- >> well not really. no, his proposal was to cap the
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non-deposit liabilities at a fixed percentage of gdp. >> right, that piece of the speech. >> so it's not about deals per se. it's true a fallout would be you couldn't do mergers and acquisitions. fundamentally it's capping the size of the financial institutions. >> i would say two things. there was a debate several years back on that topic where we would have the size of the organization relative to the gdp and cap it relative to the gdp and i think that's tough to do because people don't go into work trying to do second best. people go in to work trying to do as good a job as possible and to compete and try to take shares so to tell somebody you can only compete this far and not any farther is a hard thing to manage, and execute against, and then i was also referring to, as you indicated that you've got the m&a side of the equation as well and people always
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assumed that the guys would not be able to buy depositories but he's lowered that line to the high end of the dsiffies. >> i don't agree with it. i think the whole debate about too big to fail is misguided because i think actually we've lived in this country and other countries with too big to fail for effectively generations. continental illinois was rescued in 1984 and i think we're going to be living with that -- >> i'm glad you cleared that up. you got a lot of hats you wear. this is the investment banker hat coming out. i'm proud of you. >> no, i think the debate about too big to fail is misguided. we've had it for a long time, going to have it for a long time. theish sue proper regulation and capital ratios, liquidity and obviously management. i don't think it's the idea that an institution can't be above a certain size. >> we'll talk more about this because i'd like to get andrew's thoughts, he spent a lot of time
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on this. betsy, thank you. >> question ring the register on it. this is an exclusive interview this afternoon, steve liesman sitting down with lloyd blankfein, alan simpson and erskine bowles, live at 12:30 eastern. coming up much more from guest host roger altman and former senator ted kaufman had the opportunity to coach vice president joe biden, he's a long time confidant of the vice president. we'll get his view on the race for the white house and what we should expect to hear tonight. ♪ [ male announcer ] how do you turn an entrepreneur's dream... ♪ into a scooter that talks to the cloud? ♪ or turn 30-million artifacts...
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welcome back to "squawk box." making headlines some top executives at the world's largest private equity firms sent e-mails that allegedly show them plotting to scoop up companies on the cheap during the last decade's buyout boom. court documents with those e-mails were unsealed yesterday. this is all part of a lawsuit filed by shareholders in companies bought by private equity firms, alleged that buyout giants held down the value of takeover targets by colluding on deals. one example, in september of 2006, blackstone and kkr were both circling free scale semiconductor after blackstone outside kkr's consortium,
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hamilton james e-mailed about henry cravis writing "henry called to say congratulations and they were standing down because he told me before he would not jump a signed deal of ours." dan ackerson, working at carlyle writing "asked us to step down" and tpg saying "all we can do is do unto others as we want done unto ourselves. it will pay off in the long run even though it feels bad in the short term." >> couldn't you write off some of this as saying look nobody wants to get involved in a messy back and forth bidder war and it's costly and suddenly the deal doesn't look like it makes sense anymore if you get into that situation? >> absolutely. however, some of the e-mails suggest something larger going on, maybe not in a grand scheme, but -- >> you scratch my back i'll scratch yours. >> we have roger altman, i'm
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curious, you worked on some of these transactions. do you have views? >> i haven't been following the suit itself, but there's a lot to what becky just said in the following sense. i mean half the corporates or the financial sponsors around the world don't want, for reasons of style, to break up an agreed deal, whether the merger agreement is finally signed, it's not their style. i'm not sure if it's collusionary, if there's such a work. >> if there's you step down on this one and i'll help you on the next one, how do you think about that? >> i don't know what happened in free scale, i wasn't involved in that transaction but i'd be surprised if these things were breaking the law because god knows they're not saints, to put it mildly, but i think what you're really talking about is how aggressive you want to be in pursuing deals and some people
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want to be hyperaggressive, and some people don't want to be. it's a matter of how you go about doing deals. >> the multiple of the companies, the takeover premiums were enormous. the somehow shareholders didn't get the competitive boost that they should of, the idea, a lot of these didn't work out so well either. >> in the background, during the bubble, some of these deals are so big that you had to have consortiums. >> right, and that's part of the issue. >> when we come back, the stage is set the stakes are high, former senator ted kaufman prepped vice president joe biden for tonight's debate. we'll find out what he told him and if he can make up for the president's performance the last time around. "squawk" will be back with more from roger altman after a quick break. tomorrow, "squawk box" has a huge line-up from the baron investment conference, ron baron will be our guest host at 6:00 a.m. eastern, we'll talk politics with steve wynn, the
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get some more thoughts from roger altman, deputy treasury secretary under president clinton. roger, earlier in the show, i mentioned it's four days with the markets seeming to pull back a little bit, but the larger picture might be that earnings are going to be for the first time in a while, they really might be not as good as what we're used to. i made the analogy people said yesterday it's like the boy who cried wolf for five straight quarters they heard they were going to be bad but this time it's possible with cummins engine and some others that europe and china and we're not going gangbusters here, maybe it's coming home to roost but we're near five-year highs on the averages. is there a disconnect based on qe3 for where the markets are? >> joe, the earnings issues are one part of the picture but i don't think that's the biggest part of the picture. the biggest part of the picture i think is that the global economic outlook has darkened, so we were sitting here a year
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ago on this set, we would have said to ourselves looking at the world, well, west u.s. and europe weak, east, china and india and others strong. today i think we say to ourselves west even weaker, east slowing down. we all know about the china issues, 7% or so, india down to 3 to 4, brazil 1.5 and so forth so as the i in, f confirmed a couple of days ago the global economic outlook has actually worsened which is really something, since we're 3.75 years from the trough at least in the u.s. which was june '09, according to the national bureau of economic research. i think the big thing that's going on and playing into the earnings reports, yes, but bigger than just alcoa versus cummins is this darkening global economic outlook which is why i think the federal reserve and the ecb are exactly in the right place in terms of maximum open throttle because the risks are more to the downside.
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>> i look at it in the other way and that is that the fed, because they can't get any help from congress or fiscally they have it all on their shoulders, so one of their tools is to increase the wealth effect by o doing qe3 and making the stock market go up. >> true. >> that's something they do but it's unjustified. >> why? >> because it's happening with all this dark picture you just painted here we are at five-year highs, orchestrated by the fed to make people feel better ben when it's not justified by the underlying economy and there seems to be a risk doing it artificially. >> i disagree. the fed is in exactly the right place. history will judge the actions from the federal reserve late 2008 through the present are heroic and there's a textbook case of how to respond to a financial collapse. >> do you think they will collapse? >> i'm not smart enough to know the answer. >> if it's a sugar high and something that's not justified, you know what i'm saying. >> i know exactly what you're
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saying. >> are we setting up for a disappointment when the market comes down to where it should be? >> i don't know that the market will do that, because there's no reason to think that the structure of interest rates is going to change. >> no reason to think they'll stop to turn off the faucet, i don't know. >> but i think if you're a central banker you see the risks to the downside and you say we have to prevent, we have to mitigate those risks and that's what the federal reserve and the ecb recently are doing. >> the job market's crankin', i don't know what you're talking about, risk to the downside, we're surging in jobs added. >> the job market's beginning to show a little life, but -- >> we're dropping a half a point every two months, boom. >> no, no, we both know if you look at the broader measure of the labor markets they've moved very well. they've improved a little bit but not as much as the unemployment rate. >> look at that, woo, like a rocketship. i agree, i think -- the state of things -- you have something? >> no, i don't. >> why doesn't the ecb cut
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rates, if that's the case i've been kind of stunned they keep sitting there. >> i don't understand that either. but i'm afraid that we're only around halftime in the eurozone crisis. i really think this is going to play out with great difficulty over the next couple of years and when you think of the need for europe to move toward reasonable form of fiscal union, a reasonable form of banking union, think how slowly it's going to take for them to get there if you look at what's occurring day in and day out so maybe the worst from a market point of view of the eurozone crisis is behind us but in terms of the big picture this is going to take another couple of years at least. >> ouch. do we run out of bullets at some point when it comes to that? >> it's tough to say because i think the ecb's pledge will intervene in the secondary markets for the weaker sovereigns as long as they apply for primary loans and accept the conditionality of that from the esm, it's a serious, big pledge and just up to spain for example which is the next in line to actually apply for that and
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except the reforms that are going to be necessary, whether it's attached to the imf or attached to the esm necessary to do that. they're going to have to do that. i don't think they'll have any alternative. >> roger we have to go in a moment but i want to go back to an initial conversation about taxes and democrats in particular and we talked about broadening the base. sorry to switch topics on you but i always wonder why the democrats have always used this 250 number and why when we talk about broadening the base why they don't go down to a lower number. if the median income in this country is $50,000 and assuming the democrats want to protect people at the bottom or even the "middle class," why isn't the number 90,000, 100,000 or 120,000? >> first of all i wish i felt differently but the idea we're going to have tax reform over the next three, four, five months of the type you're talking about in order to resolve the fiscal cliff is i think fallacious. it takes longer.
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are begoing to see tax reform over the next year? i think the answer is no, i mean big, sweeping tax reform, lower rates and broaden the base, other than possibly at the end of next year corporate tax reform so i think it's academic, but if we were to lower the rates, then you could think of different numbers in 250. >> roger, thank you for being here. >> great having you on set. >> we always get to see you from abroad or across the river. >> better looking in person, i think. >> i think so, too. >> you notice that? >> very obvious. >> i think i'm going to stay now. >> thank you, roger. we hope to have you back here on the set. >> thank you. >> i imagine you'll be watching the debates hosted by becky and carl this evening. right here on cnbc. when we return senator ted kaufman will talk about tonight's debate and the economic impact on the election, and then eyeing the turnaround, bausch & lomb's ceo will join to us talk about the next chapter for the contact lens giant and their pursuit to return to the
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public market. "squawk" is back after this. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused.
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kentucky in tonight's vp debate. former senator ted kaufman has been coaching the vice president. he says biden is ready to play hardball. >> no pain. >> no pain. >> no pain, all right, let's do it! focusing on vision. >> oh, oh, i can't see! >> the ceo of bausch & lomb will join us to talk eye care, emerging markets and a possible return to the public market. and our "what's working" series continues with artisan james kieffer. the third hour of "squawk box" starts right now. ♪ ♪ you think it's over now, you think we'll go away ♪ ♪ but we keep coming up, you can't keep us down ♪ ♪ ain't temporary, no welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky
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quick and andrew ross sorkin. coming up this hour, former senator ted kaufman has been prepping vice president biden for tonight's debate, long time confidant of the vice president. we'll find out what mr. biden has been studying and the issues that he plans to tackle. i don't know how much ted will tell us but we'll figure it out. the ceo of bausch & lomb will join us to talk about the strength of vision care and a possible return to the public market. at 8:30 a.m., we are going to get the closely watched weekly jobless claims numbers. economists expect claims to drop to 365, just down a couple thousand from 367 last week. we'll also get some international trade data and import/export prices and in the back half of the hour we're going to continue our "whaeps " working" series with morningstar's domestic managing director of the year, james kieffer of artisan partners. and steve liesman has a special
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interview with goldman sachs ceo lloyd blankfein, alan simpson and erskine bowles from the president's debt reduction commission, steve will join us with more later this hour. >> and we have another programming note, becky and carl are hosting the vice presidential debates this evening so keep your eyes on that. >> the testosterone is going to be flying at that, with liesman and the four guys. >> and they'll have fun tonight, too. >> testosterone you know what i mean? >> i got you. let's talk the headlines on wall street, jpmorgan's cfo doug braunstein will step down within the next couple of quarters. people familiar with braunstein's plans tell cnbc he will be taking another post within the company. he is among the executives who on their watch, jpmorgan's london wales trading losses took place and questions about all that. braunstein is expected to lead the bank's earnings call still tomorrow morning. dealbook is reporting the
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fbi investigation into the bank's $8 billion, $6 billion trading loss may not implicate ceo jamie dimon. the investigation does not appear to touch the upper echelons of jpmorgan's management but the company is under investigation by the sec as to whether it misled investors about the size of those losses and goldman sachs reportedly says it has found little substance to allegations made by former employee greg smith. greg smith has a book coming out, he claimed the bank has a toxic environment where bankers refer to clients as muppets. "the financial times" reports an internal goldman review found weeks before smith's public resignation he complained about his bonus and said he deserved to be paid more than $1 million. we were talking about the different muppet characters. >> the book is going to make $1.5 million. >> the book will make $1.5 million and i don't know if he was referring to miss piggy or kermit the frog. worth noting muppets in the uk is suggestive of the word gullible, so it's not --
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unclear -- >> it's an empty puppet as opposed to miss piggy or i don't know who you'd want to be. deal news, we have a little bit of it, japan's softbank is said to be in talks about a $12.8 billion stake representing about two-thirds of sprint. nhk reported the original story and the "wall street journal" is saying those talks are advanced. it would be the largest foreign stake purchased by a japanese company on record. and the s&p is coming off four straight days of red, the dow logged another triple-digit loss yesterday. tepid start to the earnings season, we've been talking about it all morning and worries about the sluggish global economic growth. the three major indexes are now in negative territory for the month. take a look at u.s. equity futures at this hour, dow looks like it would open up 29 points higher, nasdaq 12 points higher and the s&p 500 up a little over four points. overseas in asia things are down marginally but not by much. take a quick look at what's going on in europe, which is to
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say we've got green arrows but again, just virtually flat. >> tonight is the main event for the vice presidential candidates. after president obama's debate performance last time around the stakes are very high for joe biden now. joining us is ted kaufman, former democratic senator for delaware, he's been prepping the vice president for tonight's debate and senator, thank you for joining us this morning. >> good to be here, becky. >> it's good to see you, ted. we know obviously you're very close to vice president biden. you were his chief of staff. >> right. >> you took over his senate seat. >> right. >> and we've been hearing from several people today that they expect the vice president to come out swinging from the start, and to have 90 minutes of pretty hard-hitting combat almost. is that the style that we should expect? >> i think -- i don't know what we're going to expect. clearly there's three players out there on the stage and they determine a lot of what's going to happen and i think a lot of it is going to depend on how the
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moderator conducts it and how congressman ryan does. congressman ryan and vice president biden, just like president obama and governor romney, have really, there's really stark differences in this campaign about what's going to go forward. if you just watch the republican convention and the democratic conventi convention, there's very different views of the future of the country so how that gets discussed will depend a lot on all three players on the stage, but i think the main thing is there are stark differences going forward and congressman ryan i think is obviously a very smart person, 14 years as a member of congress, i think probably the leading spokesperson for the republican party on budget and economic issues, he spent a lot of time in congress and one thing he learned in congress is how to debate. you debate in the committees, you debate on the floor, so he's going to be a formidable challenge and i think he and vice president biden have enough differences and reflect the differences of the campaign that
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it will be a very i think substantive debate, i think it will be a very fun debate though. >> ted, i was surprised at the first presidential debate just how many specifics were brought up, how numbers played into this. it was not kind of talking points, and i think mitt romney was largely responsible for that, he kind of fell back on what he feels comfortable with. >> yes. sure. >> knowing paul ryan that's something he feels comfortable with, too. >> right. >> do you expect to see numbers being brought up on both sides and this being as you said a lot of specifics coming through on this debate and not talking points? >> no. i think there will be a lot of numbers. most of the problems we face there are a lot of numbers involved. as president clinton said at the democratic convention, this thing is really all about arithmetic, but then he went on to explain the problem without using one number so i think the issues are much bigger than numbers but there will be a clear discussion of numbers. i think congressman ryan's hardest thing is trying to keep up with what governor romney's
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position is on any one of the issues. one of the things that threw president obama off was finding so many new positions like there's no $5 trillion tax cut, i'm not going to cut education when there's already a proposal, the ryan proposal which would have cut education by 20% and just yesterday the fact that the governor changed his position on abortion so i think it's a challenge for vice president biden because you don't know who you're going to be facing in terms of the issues, it's going to be a challenge for congressman ryan because he has to keep track of the different positions governor romney has taken to decide the position du jour for today's debate. >> one of the numbers people are talking about quite a bit is the jobs number from last friday. the jobs reports showed a modest gain of 114,000. the unemployment did fall. what is your sense of how the economy is performing right now and what do you think vice president biden will go out and kind of have as his jobs story?
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>> sure, well you know i was in the senate during this period and it's remarkable to me how people talk about this thing as if we're just as bad off as when we started. if you go back four years ago the month that the obama/biden administration was sworn into office we lost 720,000 jobs. and people talk about the recovery act but the month the recovery act passed, we hit bottom in terms of jobs, we now created 5.1 million new jobs. the other thing, becky, and you know the stock market, what was the month that the stock market hit bottom and started up again, the month we passed the stimulus bill. we have a long way to go. what's amazing to me, we have taken a major attack to our heart, second worst economic crisis since -- the first since the great depression and you just don't walk away from that and i think that we're still going away but i think this administration has done a lot and frankly when you look at what the governor and the
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congressman are promoting it's the same thing that really got us into this thing in the first place. >> senator, we have erskine bowles and alan simpson who are going to be interviewed by steve liesman today. >> yes, yes. >> what do you think about bowles-simpson and do you think it works its way into this debate today? >> i don't know whether it works its way into this debate today because there are so many other issues and, frankly, congressman ryan was really the one that kind of sent it down. basically he got all of the conservatives, wasn't on the panel but he convinced the conservative house members they all voted no against it so it's not much of an argument. i want to tell you i have incredible respect for erskine bowles and for senator alan simpson, first before they even gotten involved in this and have more respect how they sat down, did the hard work and got a lot of people to sign on to this. lot of democrats signed on to simpson-bowles an it's a first start. personally it's not exactly what
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i want -- >> you think it's a blueprint for where we should start? >> i think it's a good blueprint but really what you have to do in this thing and president h.j. bush did it, what i love about this is like we never did this before. we've done this before, we've run a surplus. we know what to do taken wasn't like 50 years ago. it was just 20 years ago and what president h.w. bush and clinton after said look everything has to be on the table, has to be revenue, has to be expenses. this is like economics 101, business investment 101. web a company is in trouble they have to look at revenues and expenses. that's what bowles-simpson did and laid out a plan. nobody's going to get the plan they want. >> that's different from what we heard from chuck schumer on earlier this beak. >> what'd he say? >> they're wrapping, we have to go. senator kaufman, will you come into the studio and join us because i'd love to talk more about this. >> hey, listen, i'm like poor relations, when i'm invited i come. invite me. >> you are invited and we look
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forward to talking to you soon. thank you for your time. coming up it's healthy week at nbc universal, you see it sometimes on the corner of your screen over there, focusing on healthy vision this morning, the ceo of bausch & lomb is making his way to the "squawk" set, the company was taken private in 2007. we'll ask brent saunders about a possible return to the public markets. . tomorrow, "squawk box" has a huge line-up from the baron investment conference. ron baron about be our guest host at 6:00 a.m. eastern, talk politics with steve wynn, the economy and investing with david ruinen stein and the chairman and ceo of underarmour and executive chairman of hyatt hotels. on top of all that we'll get earnings reports from jpmorgan and wells fargo, it all starts tomorrow at 6:00 a.m. eastern.
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breaking news on sprint, david faber joins us from the nyse. >> a becky a lot to talk about in terms of a story that was broken in part overnight in japan. i'm talking about softbank's talks to acquire what sources
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tell me would be roughly a 75% stake in sprint at a premium. the talks continue at this point, and have not fully nailed down price, although they are close. some of the reports out there had it at an overall price of $12.8 billion. let me step back for a second and tell you what we do know. there are some interesting parts of this as well. these talks began this summer, and actually involved sprint, t-mobile, owned by parent deutsche telecom and softbank, which were trying to put together a deal under which sprint and t-mobile would get together, softbank would invest a significant sum of money to own a majority of the combined company, thereby helping to cash out largely deutsche telecom while sprint shareholders would also own a decent percentage of that overall company. those talks fell apart when t-mobile and its parent deutsche telecom decided the anti-trust risk of doing a deal was too
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large. they went on to make a bid and deal to acquire metro pcs. softbank persisted and still is there and in fact sources close to the deal tell me it may be announced in the next week or two. their main motivation appears to be their interest in spectrum, and spectrum overall not just controlled by sprint, but also by its partner, clearwire, and from what i'm hearing, part of this deal also would involve the purchase of clearwire by softbank, again, very much unclear on price, clearwire about a $2 billion market cap company, only a buck and change in terms of the stock price t has a good deal of debt. sprint owns 48, 49, maybe more percent of clearwire of the spectrum and the likes of intel and other cable companies that own part of it as well, they would want to buy out all of that apparently softbank's interest lies largely in spectrum, what they believe they can do with it, how they believe they can take on in a significant fashion the duopoly
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that somewhat exists right now in wireless phone service between verizon and at&t, so a dramatic deal not yet done under which softbank would, in fact, acquire a majority of sprint, leaving a small public stub in a sense, not yet done, but under way, and very close, in fact, to getting done at this point. we're going to have a lot more on "squawk on the street" or even "squawk box" as we get that. guys back to you. >> thank you, david. lot to talk about. we're also talking about healthy week here on nbc universal. >> i saw you writing everything down and sending it right off the deal book. >> i did not write down a thing. >> everything faber said this, this and this. >> good note. >> write off the deal book. >> who do you think his source was on that one, too? you should really -- okay. we got to keep moving. it is healthy week at nbc universal and this morning we're focusing on vision, bausch & lomb, and we should -- >> lom, holomb, we had a big
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debate on the set. >> it was not a debate. >> it rhymes with mom. >> you're infatuated with your mom. it's mom, bausch & lomb. >> you see it looks like comb. >> right, it looks like comb. when you were introing it even. >> revenue was a record for the company but is it a right time to return to the public markets? joining us on the set bausch & lomb -- very hard for me -- ceo brent saunders. >> i give you an easy one, no one cares about your eyes more than your mom, bausch & lomb. >> can you take the "b" off and call it a day? >> it rhymes with mom so good way to think about it. >> you went private five years ago. >> five-year anniversary coming up in a week or so. >> you'd like to come back to the public markets? >> what we were focused on is a
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profound transformation in building the best eye health company we possibly can. we really have no time line or plan to return. >> you talk publicly thinking maybe we should at some point. >> clearly it's an aspiration to return to the public markets but our focus is building the best company we can. we're doing a great job, our people are doing great things around the world, and it is a profound transformation, great top line growth. >> let's talk about the transformation. so many people think of the company as contact lenses. and solutions and things and the company's really changed in many ways. >> that's a good thing. i like people think being our company and we are in the vision care business so i'm glad they think of us for something, but we're so much more, our vision care business is an important business to us and it's growing, but our largest business at bausch & lomb is our pharmaceutical business, and then we also have a very strong and growing surgical business, so if you think of bausch & lomb -- >> what is the surgical part?
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>> we make everything an ophthalmic surgeon needs for surgery. we have a focus on cataract surgery since that's the number one surgical procedure in the world but we think about everybody. the best way to think of bausch & lomb is very focused on one therapeutic area, eye health but playing broadly with great diversity withen that space. >> lasik surgery, has it hurt your business in terms of the contacts? >> it hasn't and i'm a lasik patient doing great. contact lens penetration is low among corrected vision so in the united states it's only in the low 20% in places like europe it's in the teens, japan is pretty high in the 40%, but china is a great example, very low penetration. lot of white space. >> briefly about china, that's a huge growth market for you but i was wondering, you know, is there knockoffs? what tea like doing business in china specifically for your business? >> in china it's one of our
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strongest markets, a top five market for bausch & lomb. we don't view it as an emerging market. we view it as a growth market and we do worry about our brand in china so dealing with knockoffs is an important part of our brand management, our brand is very important in the chinese market, and we do see knockoffs. i was there last year and i went to a flea market and i bought some renu, our multipurpose solution and brought it back to rochester and it wasn't the real thing. >> how close did they get? >> they don't get close. making contact lens solution is much harder than you think. >> i've always -- maybe so. i don't know saline, and they charge $8 for it. i don't want to ruin your -- >> you're absolutely right and i'll tell you what, i wasn't in this business, i came to this business a bit of a novice and i thought how do they get away charging $10. and the reality is it's almost as hard you think this is a biologic drug. you measure the ingredients in parts per billion, you have to
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put enough disinfectant in to kill nasty bugs but not enough to hurt your eye. finding that balance is incredibly scientific. >> i help with the pronunciation. >> thank you for being here. rhymes with mom, bausch & lomb, not comb, worth pointing out to the viewer's and myself. >> this will not stick. coming up, breaking data on employment and trade, international trade day and import jsh export rices at 8:30 eastern and we'll continue our "what's working" series with morningstar named artisans james kieffer, the domestic fund stack manager of 2011. [ male announcer ] the 2013 smart comes with 8 airbags, a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety. and his new boss told him two things --
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when we come back, we have breaking economic numbers and international trade data for august and import/export prices for september, the jobs number will be the one people are watching. as we head to a break look at the u.s. equity futures ahead of the numbers, positive territory for all three of those indices, dow futures up by 42, and this comes after three down days for the dow, another triple-digit loss yesterday. tdd#: 1-800-345-2550 let's talk about low-cost investing. tdd#: 1-800-345-2550 at schwab, we're committed to offering you
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welcome back to "squawk box." litany of numbers. let's start out with september import prices up 1.1, hotter than expected, that's month over month. year over year down 0.6, that's less than we were expecting and there were revisions making the import prices worse last month, originally released 0.7, now 1.1. initial and continuing claims, initial claims dropped like a rock, dropped 30,000 to 339 from a slightly upward revised 367 to 369. if we look at august, trade balance minus 44.2, so that is a deficit on the trade balance for the month of august of 44.2
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billion, last month had a subtle revision. 44 is the highest levels since may of this year so summarize we saw a big drop in claims on the initial side, we saw import prices less tame than many have anticipated and of course, if we continue to monitor the trade balance, one would suspect that the weaker dollar and it's much weaker than we start at the beginning of the year would shrink that but it seems to be going the other way, part of that of course might have to do with the dynamics of what's going on in trade in the rest of the globe. "squawk box" gang, back to you. >> rick, thank you. we're kind of digging through those numbers, too, head scratching taking place here over how you came in with such a big drop. steve, you got any thoughts on this on how to weigh in? >> i'm sorry, becky, i've been focused on the other interview, there were special factors, weather related sometimes you get a strike coming off back-to-work kind of thing
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coming off of claims. i don't know there was a special factor i saw any of the econo economists mention. i had it last time below 350 but not 340. this is, i'm going to call this an outlier until there's further evidence. there's no reason to think we've had this kind of acceleration to the upside, we were talking about reducing claims on this. i didn't hear the trade number. that's going to factor into gdp as well, that's something else we'll want to follow. >> is rick gone? >> don't start. don't start. joe explained it within a nanosecond. get jack on the phone. just call jack. >> we have three more thursdays, i think the claims number will be down by 139,000 by november 1st, whenever that is. can't we get it down to 139? >> we could do 139. >> steve pointed out crazy to
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get a conspiracy theory because this is state level data. >> state level data going into the federal government which ultimately does report it. >> i don't know how many of that is the jobless claims or -- the expiration. >> i talked to tom nardone, assistant commissioner for data about the concept. he also said they've gotten a lot of hate mail at the bls, and referred some of them to security at this point. none of them were actually threatening but there's been concern about that. >> i do it that way and my picture doesn't end up on "the huffington post" next to stuart vining and rick santelli and jack when much as a truther. mine doesn't end up there. i say it to you as sort of we'll be down at 139. you remember what my forecast was last friday. i said the participation rate would go to 40% and the unemployment rate 5.9 not 7.8. so i don't really get thrown in with the truthers. >> you should be, though, shouldn't you? are you upset by that? >> i'd rather be around the
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edges here, just giving you fixed -- >> i want to know what the opposite of truther is. >> falsies. >> you take out the truther position. >> falsies, the jobbers. >> steve we are thrilled because you have a huge interview coming up. let's do a proper setup. back in july we spoke to erskine bowles and alan simpson about the challenges of controlling america's deficit, these are gentlemen we have been paying a lot of attention to. here is what alan had to say about america's health care system. >> there's nothing in it that has cost containment, not a thing and people say it will happen. let me tell you, it won't happen and the reason is very simple. you're going to have preexisting conditions of a 3-year-old that will live to be 60, one person in the united states weighs more than the other two, you got diabetes a and b, you got to do some tort reform, you got to do something with docs, you got to do something, 10,000 a day turning 65. >> and here's what erskine
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bowles had to say about the consequences of runaway deficits and the fiscal cliff. >> if we don't get these politicians to come together and, we face the most predictable economic crisis in history. i think it's absolutely clear that the fiscal path we're on is not sustainable and for me, the best analogy is these deficits are like a cancer, and over time, they will destroy the country from within. >> well, here we are nearly three months later, the situation has not improved, there's been no movement that has taken place anywhere in congress. you got to guess that these gentlemen are probably getting more and more frustrated with the process and the economic situation has gotten worse along the way. today steve liesman is talking to alan simpson, erskine bowles and goldman sachs ceo lloyd blankfein at 12:30 eastern time and steve i cannot wait to hear what they have to say. >> i'm thinking about, i started last night reading the transcript thinking like this is a very different time, back in july, there was at least a
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modicum of sanity in the world, get something done, before the political hormonal response kicked in with many people. >> i talked about hormone -- >> did you really? >> i said there's a lot of testosterone in the group. >> it's a special enzyme secreted in the political system. >> you're not listening to me, you're all bald. >> alpha males. testosterone is where -- >> a lot of, right. >> testosterone kills the dht which kills the hair. >> thank you. >> it's just like you guys are professional tripper-uppers is what you are. what i'm trying to talk about here is now it's even worse in the sense forget about the economic backdrop is that getting something actually done seems further and further away. and i was telling to andrew before we started here was it seems as if the simpson-bowles brand has gone up, but the simpson-bowles political support inside the beltway appears to
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have gone down. >> on both sides. >> on both sides. on both sides. those are the issues out there, can simpson-bowles avert the fiscal cliff, are presidential candidates moving towards it or probably better said moving away from it and how can congress be moved toward deficit solution and what does it take to take on entitlements? let's listen to what candidate romney said at the debate about simpson-bowles. >> i have my own plan, it's not the same as simpson-bowles but in my view the president should have grabbed it, if you wanted to make some adjustments to it, take it, go to congress, fight for it. >> and then here's president obama, who when asked about it and he kind of moved towards it but again, with president obama, he's had the opportunity to take an action towards it and hasn't. here's what he says. >> the way we do it is $2.50 for every cut, we ask for $1 of additional revenue, paid for as i indicated earlier by asking those of us who have done very well in this country to contribute a little bit more to
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reduce the deficit, and governor romney earlier mentioned the bowles-simpson commission, well that's how the commission bipartisan commission that talked about how we should move forward suggested we have to do it, in a balanced way with some revenue and some spending cuts. >> but of course notice he has not embraced it. i don't know, becky. i'd be more interested in your thoughts for where to take this now. >> you know, the thing that really struck me this week was chuck schumer going to the national press club and making this speech in front of the cameras to say that he thinks the only way you can do it, draw a line in the sand is that any lower tax rates, that money has to be put back in to the deficit or you can't lower the tax rates if you're going to get savings by closing loopholes you have to take the money and put it towards the deficit. that may be a legitimate viewpoint but the idea you went to the press club and made this announcement instead of working behind the scenes with a group of eight or senator mark warner or taking things seriously, this
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was a political play to say we've changed, we're no longer about three parts of spending cuts to one part revenue rising and that's really complicated, if you're not going to get back to the original agreement we couldn't reach an agreement on. i mean, do it behind closed doors. do something that's actually making a difference, don't sit here and political grandstand. that bothers me. >> that's a lot there, especially from -- >> grover norquist written five reasons why conservatives hate -- >> who cares about grover norquist. >> it's more inconsequential what schumer is saying. >> some people on the set say you took -- >> guys in the senate and grover norquist, the senate doesn't do much either right, with ten comes down to it, pontificate. >> i think what's happening on the wings of both parties, when i see schumer and norquist opposing this plan, does it not make you think there's maybe some merit to it? you got to make both sides angry
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to get there, and when i talked about the idea of what's it going to take, to take on entitlements, i don't think either side has come to grips with that because we talk about this in a republican/democratic split. it's going to take an amazing amount of bipartisanship to create a political fortress that can be withstood, say the realtor lobby, what is that? is that a democrat or republican favorite? it's a little bit of both. you want to take on mortgage interest deduction and take on some of the tax breaks, it's not a republican/democrat thing and that's where the political part of it is. >> if they were to do something now there's enough time you could grandfather some of the things, you could push some of these down the road and for example bowles-simpson and the plan with social security, that doesn't raise the retirement age, raises it one year until 2050. if you act now you don't have to take some of the more draconian measures you would. >> i was struck by what roger
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altman said this morning. the gist, when it took four years to do the '86 tax reform. >> sur spriprised me, too. >> simpson-bowles is not the answer to the fiscal cliff but don't we have people who come on who say if we could enact simpson-bowles. >> we had sam nunn and dave cote, they said avert the fiscal cliff if we can't reach another solution six or nine months down the road bowles-simpson kicks in. >> the same as last year with the debt ceiling. >> the obama administration has a commercial coming out about grover. >> being a monuppet? >> not norquist but super grover. >> henry and max love grover, love the cape. >> i'm more an elmo fan. >> they go from elmo to grover. grover is coming next. >> steve, this is huge, we can't
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wait to see this today. and lloyd's there to weigh in. >> what are we going to do with lloyd? i think there's a reason for this. >> he's going to bring the ceo perspective. >> also i think there's an effort by these guys to take that brand and hook it up with business and get business to pressure congress to do something about this, to say you know what? business doesn't want to live this way. this is not a way to run the railroad of the american economy along and potentially falling over the fiscal cliff. >> 12:30 we'll be watching. >> we will be watching. coming up, morningstar named in the 2011 domestic stock fund manager of the year, up next portfolio picks from artisan's james kieffer and don't miss "squawk" tomorrow, we'll be covering the annual baron investing conference with guest host ron baron and some special guests including chair nan and ceo of underarmour, executive chairman of hyatt hotels, carlyle group co-founder david rubenstein and steve wynn of wynn restortorts, starts at 6:0
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a.m. eastern.
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all this week we're getting portfolio picks from top fund managers as part of our "what's working" series. this morning focusing on large cap funds and technology. joining us is artisan partner's jim kieffer, a 2011 morningstar
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domestic fund manager of the year. earlier we had altman on. we had a couple of rough sessions but we're seeing some earnings that aren't great and we're wondering whether it's going to be a tough quarter in terms of earnings and yet the market is high and i was asking whether qe3 has gotten us to a point where maybe the market is ahead of itself based on whether it's not justified by fundamentals. do you care about things like that or are you just always buying stocks that you like? >> i think you've got to focus on the business and you are investing in businesses here, we're not trading stocks so the key needs to be understanding what is going on at a business level. i don't want to be ignorant to the idea that the shorter term events may indicate something about the strength of the business and how we should think about it, but no, i'm not sitting here before any earnings announcement getting excited about whether it's going to meet or beat the earnings. >> in terms of china or europe you might look at that based on the individual companies you're talking about and whether it could affect their exports to
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the countries more than the macro issues of what's happening over there. >> that's part of it. the reality is business is sloppy, and events like that happen, and so you need to anticipate that not everything goes right for your businesses and make sure that you're being given some room for that in your pricing. >> is there an overall trend, i know we talked about technology in large cap but is there something that, happening in the world that makes you decide which areas to go into right now or is it just company by company basis? >> it's company by company but our job as we see it is to seek cash producing businesses, selling undemanding valuations and when we look across our whole opportunity set the tech names come up with the greatest frequency. it's amazing. >> large cap tech. >> yes, large cap in particular. sorry. >> can you give us your top five? >> yes, it's amazing we own three of the four horsemen from past days, with he own
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microsoft, we own cisco and orac oracle. i never thought we'd own any of these guys and high single teen digits and we own google and apple in our portfolio. the valuations available in tech are very interesting relative to what else all is out there. >> that's almost across the board with those guys. does it make it more attractive if there's a dividend or that doesn't matter? >> i don't think it matters. there is a market interest and capital allocation safety issue that comes about, but seems more good than bad. >> you can give me your next five? >> after that i think it varies. one of the things, we look at areas under pressure and right now there's a lot of concern about natural gas supplies and that creates pressure and opportunities for you. those are areas we look at. we own simrex and apache, these
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are companies that operate in an effective manner, they bring rigor to how they approach their business from a financial and operational perspective so they'll have staying power and should emerge as winners and we believe in economics 101 and the supply and demand balance at some point. >> you own intel, you own facebook, you own any social media, any like chipmakers or no? >> no, as value guys we have a tougher time with names like facebook and so forth. we own texas instruments and analog. >> you own hewlett-packard? >> no, we got suckered into that and lost some money but were smart enough to get out before the losses turned worse. >> yahoo!? >> not a yahoo! player yet. >> not a yahoo! player yet. so we got tech and natural gas. can you give me one more thing? >> insurance is a big industry for us, insurance is kind of an interesting contrast relative to banks. >> what kind of insurance? >> property casualty.
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>> what are your favorites? >> berkshire is still a name with us, progressive, chub, lesser known names a lied world and arch capital. there's a whole variety of names out there, the best of breed al world. >> good ideas. when we come back we'll head down to the new york stock exchange for the latest buzz on wall street. [ horn honks ] hey, it's sandra -- from accounting. peter. i can see that you're busy... but you were gonna help us crunch the numbers for accounts receivable today. i mean i know that this is important.
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let's get down to the new york stock exchange. jim cramer joins us right now. jim, i know david's got some more news on the sprint story, things he's been following up on but we also just got that jobless claims number, which was a drop of 30,000. came as a big surprise to people. >> you got to blow up everything because of the sprint news. david faber owns that story. watch for clear wire, that's up big. i don't trust that common stock.
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jobless claims, keeping with a number we saw last week that was a survey number. i defer to steve leisman on this because he's been the most honest reporter on this and knows more than anyone. obviously it is a good number. this blankfein interview can be seminole today. i want to know what he thinks about this tell-all book. goldman sachs doesn't have tell-all books. these are all big things today. i'm shock it's all coming together all at one time. 12:30 today. i'll stop paying attention to the tape. >> i don't think you're going to stop paying attention to everything. i think you got about seven eyes you can be following different things on. you're right about the goldman sachs things. you heard about this internal investigation where they say they didn't find anything to back this up and the guy who wrote the book apparently was complaining right before that he should have made more than a million dollars? >> he should be making -- you made that in your first seven months. i don't know what the guy was
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doing wrong. that was in the '80s. i got to point out -- i think this is really important -- there had been this considered move by lloyd blankfein to become more after statesman. just when you come out with a statesman, you got a book coming out saying the company basically is not what it was. wow, what a day to have him. >> jim, we're going to be watching that and your show in just a few minutes with everything that david's been reporting, everything you've been tweeting about in the last five hours or so. coming up, a new currency available next month straight from middle earth. we'll bring you the story after the break. don't miss a cnbc exclusive that you just heard about with lloyd blankfein, alan simpson and erskine bowles.
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stock of the day is -- sprint. symbol faber. sprint and clear wire. japanese mobile carrier soft bank is in advanced talks to buy a majority of sprint, nextel. david faber also reporting soft bank is also interested in buying clearwire as part of the sprint negotiations because softbank's ultimate interest is in spectrum. and nerd alert -- new zealand is going to accept currency from middle earth. they's releasing commemorative hobbit coins worth thousands of dollars ahead of next month's premier of peter jackson's "the hobbit." the coins feature characters like bilbo and the most expensive made from one ounce of pure gold -- did you put on deal book -- did you put